It’s been more than a year since the Bank of Spain invited tenders for a wholesale central bank digital currency (wholesale CBDC) trial. On Wednesday it announced the award of two projects. Adhara, the technology partner of Fnality, won the contract to deliver a wholesale CBDC infrastructure. And a consortium involving Cecabank and Abanca will trial wholesale CBDC for securities settlement.
Additionally, Adhara will deliver a ‘digital interbank orchestration platform’, which we interpret as a tokenized deposit solution. Adhara has already developed such an offering. The company’s CEO Julio Faura is Spanish and spent 11 years at Santander. Hence, Adhara has a Spanish subsidiary.
The Adhara project involves the issuance of two or more separate wholesale CBDCs for cross border purposes and the provision of wallets to participants. The projects specify English as a second language to enable sharing of the results.
For the Cecabank – Abanca consortium, the emphasis is on the use of a wholesale CBDC to settle tokenized securities on a blockchain platform. Hence a wholesale CBDC will be issued and distributed to participants of the blockchain platform. It aims to enable atomic settlement or delivery versus payment (DvP) for bond issuance as well as secondary market trading. Additionally, the wholesale CBDC will be used for coupon payments and support cross-border transactions.
Both projects are simulations.
Separate from digital euro trials
When the tender was issued in December 2022 the central bank emphasized these were Spanish tests, separate from digital euro work. At that stage, the European Central Bank (ECB) was very focused on a retail digital euro. The Banque de France had already run several wholesale CBDC trials.
Since then the ECB has launched a project exploring “New Technologies for Wholesale settlement”. This initiative focuses on using central bank money for settling DLT securities transactions and involves trialing three solutions, including France’s wholesale CBDC, Germany’s trigger solution, and an Italian escrow offering. Pilots involving real money start next month.
Spain is exploring the DLT securities side but also appears to be considering tokenized deposits. Within Europe, Germany is the most advanced on that front.
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